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If you are a freelancer, entrepreneur or other worker who does not have withheld taxes from your paycheck, according to him, the key deadline for making payments is approaching IRS.

Estimated tax payments for the second quarter of 2023 are due on June 15, which applies to income without withholding taxes, such as self-employment earnings, investments, gig work and more. Some registrars also make quarterly payments when their employer doesn’t withhold enough from each paycheck.

Last week, the IRS reminded them to consider quarterly payments to “stay current and avoid surprises at tax time.”

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“Estimated tax payments are key to meeting tax obligations throughout the year, avoid penalties and stay on top of your finances,” said Sean Lovison, a certified financial planner for the Philadelphia area at WJL Financial Advisors. He is also a certified public accountant.

It’s important to accurately calculate tax payments, pay on time and consider meeting the “safe harbor” rule to avoid underpayment penalties, Lovison said.

“Keep records, monitor your tax situation and seek expert advice for a seamless tax experience,” he said.

How to comply with the “safe harbor” rules.

Since the US tax system is pay-as-you-go, you can face penalties for not staying current, said CFP Kathleen Kenealy, founder of Katapult Financial Planning in Woburn, Massachusetts.

If you miss one of the four expected tax due dates for 2023 — April 18thJune 15, September 15, or January 16, 2024 – You’ll be charged a late payment penalty of 0.5% of your unpaid balance per month or per month, up to 25% plus interest.

However, the IRS has a “safe harbor” to avoid underpayment penalties, Kenealy explained. You qualify by paying at least 90% of the current year’s tax liability or 100% of last year’s tax, whichever is lower.

But the rule is “a little different for high-income taxpayers,” she said. If your adjusted gross income in 2022 was $150,000 or more, you must pay 110% of last year’s taxes to meet the safe harbor requirement for 2023. (Adjusted gross income is line 11 your 2022 tax return.)

How to pay quarterly estimated taxes

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